By Jon Hitchin, Hargreave Hale Stockbrokers, Bolton SHARES have surged to their highest levels for five months in the last few days, as the FTSE finished the year not too far off the six thousand level. The number of shares being bought and sold over the last week or so has been extremely low though, as most people have preferred to enjoy their turkeys and do their Christmas and sales shopping, rather than buy shares. The euro has also been blamed for the low volumes as some are concerned about the effects the currency may have.

At this time of year it is customary for all the big broking houses in London to predict what lies ahead for the coming year, both in general terms and which shares they think will perform well.

Before considering this, it would probably be wise to discuss what brokers predicted last year, basically to show how wrong "those supposedly in the know" can actually be. Warburg Dillon Read was the nearest with its forecast of 6000, with NatWest Markets and BZW, now part of Credit Suisse First Boston, also pretty close with 5700. Further away were Dresdner Kleinwort Benson and UBS who guessed 5600, with Chase Manhattan getting the booby prize with a forecast of 5300. It just goes to show how difficult predicting the markets actually is.

I shall leave the FTSE predictions for 1999 until another week as more brokers reveal what their crystal balls have told them this year. Two brokers have already released their favourite shares for the year however.

NatWest Stockbrokers have tipped 12 shares which they think will, though they may not of course, perform well in 1999. One research analyst at the bank said: "Our preferred stocks are drawn from the pool of companies benefiting from earnings clarity, strong balance sheets and robust cashflows." The 12 shares are British Aerospace, Unilever, BP, Allied Zurich, British Telecom, Glaxo Wellcome, Imperial Tobacco, Ladbroke, Lloyds TSB, P & O Deferred, PowerGen and Thames Water.

Credit Suisse First Boston have gone for a slightly different mix with only one share in common. They have also set end of year targets for each share which I have put in brackets. The five shares are British Aerospace (620p), Dixons (900p), Granada (1120p), Ocean Group (815p) and the investment trust 3i(670p).

Converted for the new archive on 14 July 2000. Some images and formatting may have been lost in the conversion.